How to Maximize Restaurant Profit Margin

Any business that is in the foodservice industry understands how competitive this space is. So they continuously keep finding new good ways to improve the restaurant profit margin. If they don’t, they’ll either not be able to compete with pricing while preserving quality or their margins will be squeezed out. Either way, it’s not good.

What is Restaurant Profit Margin

Along with other parameters, the profit margin is the biggest key indicator of whether or not the restaurant will survive in the long run. So it’s crucial that every restaurant understands it precisely. In a simple definition, profit is the remaining money after deducting all expenses from gross revenue. Whereas profit margin is actually the percentage of profit in relation to revenue. Here is the equation to calculate the profit margin:

Profit Margin = Profit / Gross Revenue * 100

The whole game here is how to control costs, either operating or food costs.

How to Improve Restaurant Profit Margin

Below are some tips that will really help you improve your restaurant profit margin.

Reduce food cost

While it seems obvious, but it is really one of the most effective ways to improve restaurant profit margins. There are ways to get good prices from suppliers and each gives you a certain negotiation power.

First, go with bulks as suppliers always give good competitive prices if you buy in bulks. Second, if you are a small restaurant and can’t buy bulks, try allying with other restaurants. So this will give you the power to buy in bulks so you can get good prices. Third, if this does not work, many restaurants have found working directly with farmers and producers much more effective. The reason is that you get rid of the middle man that always tops up the costs. The downside here is supply security as one day the farmer might run out of products. To mitigate this, always have a backup plan in cases like that. One more fact, buying food from locals can notably cut the cost as there is the cost for the shipping.

Control Servings

No doubt, customers would not like insufficient food if they paid for it but for sure they are ok if more food is served. So your restaurant must be able to know the exact portion to serve, not too much and not too little. That helps you really control the food cost to maximize your restaurant profit margin.

Upselling

One trick that can notably increase your sales is upselling new items to current customers. This, of course, requires you to train your waitstaff the techniques to use in order to succeed selling more items. The most important thing you always need to keep in mind is which items to upsell?. Always try to upsell the high margins items as they, for sure, can have significant differences. Doing so really helps with increasing the overall restaurant profit margin on the long run.

Have an Online Ordering System

It’s so obvious that every restaurant wants to increase sales as much as possible. Today, technology just has become so much advanced more accessible that it can create a whole online ordering system almost instantly. A good one will help you with selling and upselling because they’ll optimize the ordering process. Optimizing the ordering process is key when it comes to online sales as it requires fine-tuning every single step.

If your restaurant is looking for an online ordering system

contact us now.

Free Restaurant Advertising Ideas

Restaurant advertising is essential to achieve and maintain profitability. However, not all restaurants have the same high budget to spend on advertising. Therefore, they should come up with free and cheap ways to get the brand out and spread the word. Here we have a few ideas for restaurant advertising.

Use Social Media

People today are connected more than even on social media. So presenting the restaurants on those networks professionally can have a big, positive and long-lasting impact.

Make sure you post professional photos of your meals that make people hungry. Also, try making short videos of your kitchen to give it the living experience and post cooking tips and have fans share them. On top of that, show staff members in the pictures you post to always remind people that they are working hard for them.

As it is called social media, get engaged with followers and respond to their questions and queries. Also, interact with complaints and feedback and try to compensate the unhappy customers. This builds a strong relationship with your current and potential customers as it’s free for your restaurant advertising.

Give Away Samples

People bypassing or living around are an easy target that can be turned into customers. So pick a sample of your menu that you think people will love the most and offer it for free. The sample should be a small piece because this way people will mostly taste it delicious.

After a while, you’ll notice that you’ve introduced your restaurant to the community around you.

Send Out Offers

If your restaurant has been in operation for a while, it’s won’t be too hard to know which days are busy and which are not. So in the calm days, you should try to get things going by sending out offers and discounts to people. There are multiple channels through which restaurant advertising can be done to reach people and some are more effective than others. Offers can be sent as SMS, email or an app notification if you’re using Taker as an online ordering system. So in this way you can keep your sales up at busy and unbusy times.

Contribute in Charity Events

People always appreciate good work. So your restaurant should try to find ways for charitable contributions in the local community. This will create some buzz and bring a lot of attention to your restaurant.

Try helping the poor within the community, partner up with local food banks and sponsor charitable events. That will get your restaurant noticed in your local community which will help increase sales.

Restaurant Advertising via Contests

The good thing about running contests is that it really goes so viral. Since people are connected on social media, try publicizing your restaurant’s contest on them so it can reach the maximum number of them. You may target your walk-in customers to share the meal photo (with your brand) and mention the restaurant’s account with a selected hash tag. This really helps get one of the most important marketing ways, word of mouth.

Of course, you can go further and involve some influentials to really make it go more viral but that depends on how big the contest is.

Host a Famous Chief

Hosting a chief who is well known can become the talk of the week. Before hosting him, advertise it, publish the hosting date and put a booking system in place so comers should book. The booking system helps you organize and control customers as well as it shows that it is an event that can’t be missed. People will love that and will share their experience around your brand will really stand out.

Last, those restaurant advertising ideas can cost almost nothing. However, if conducted consistently, you will easily notice the impact that it’ll have on your restaurant. Make sure you pick up the ideas that are suitable for your and your capabilities but keep on doing it.

If your restaurant is looking for an online ordering system

contact us now.

New Updates For Admin Panel – May 2019

We’ve come up with new features and improvements this month. The update is mostly on the admin panel as follows:

Reorganizing the Menu

The menu used to have items in the wrong places. Now every item in the menu is under the proper menu section with clear naming.

Admin Order Notifications

Now you can configure which notifications you want to see in the admin panel and which ones you don’t want to see. You can configure this from the settings

Editing Items’ Modifiers Improved

We’ve given you the ability to choose how you want your customers to choose from the modifiers of the items. Here is the following options we’ve added:

Single Choice: this means the customer can only choose one and it’s required.
MultiChoice: this means the customer can choose more than one.
Min and Max for multi-choice: if the minimum is 1, it means the customer has to at least choose one.

Minimum Quantity for Items

Now you can set the minimum quantity for the items which means customers can’t order less than the specified quantity. This might help if you are into the catering business.

Ability to Sort Reports by Amount

If you quickly want to know who and what is selling more, just click on the sort button to sort in a descending or ascending order.

Customer Spending

From the customers tab, you can know how much each customer has spent.

Admin Sales Report

If your phone orders are entered into Taker by call center agents, this report tells you how much each agent has sold.

Customer Inquiries

With this feature, your customers can send their inquiries right through the app on which you can take proper actions.

Waitlist Add-on

We’ve developed the Waitlist management add-on to help restaurants that are always busy manage their waitlist through Taker easily. The customer can join the waitlist either through the website or app and you receive it on the admin panel to manage.

To activate it, go to Add-ons -> Waitlist and activate it